How does Google Adwords work?
AdWords is Google's paid advertising product, essentially businesses “bid” on chosen keywords or phrases. These are the ads that appear at the top of Google search results whenever someone searches for a particular keyword or phrase.
AdWords runs an auction every single time it has an ad space available -- on a search result, or on a blog, news site, or some other page. Each auction decides which AdWords ads will show at that moment in that space. Your bid puts you in the auction. So, you are essentially bidding against other businesses for these ad spaces.
Something else to consider…
Before you rush off to throw some of your hard-earned cash in Google’s direction we advise that you ensure that your website is as good as you can get it for organic (unpaid) traffic – simply put, there is no point paying to get people to your website only to have them leave again because they cannot easily find what they want. Google also monitors “user experience” and may show your ads less often or not at all if your site is not up to scratch!